 Market power and the Demsetz quality critique: An evaluation for food retailingAgribusiness, 1999, vol. 15, issue 1, 101-118 Abstract: This study uses factor analysis to identify five service factors that are modeled with price as endogenous variables in a simultaneous equations framework to test whether a more concentrated market structure is related to higher service levels, which, in turn, are related to higher prices (the Demsetz quality critique) or whether a more concentrated market structure is directly related to higher prices (market power hypothesis). For this study of supermarkets in 34 local markets in six southwestern states, market share and concentration are not significantly related to any service factors. However, concentration has a significant positive relationship with price in the full sample, and share also is significantly related to price in subsamples of large, leading firms. Thus, the Demsetz quality critique is rejected. Also coordinated rather than unilateral effects seem predominant. When examining store size, superstores enjoy economics up to 50,000 square feet, but most of the cost savings are offset by pricing power related to increased services levels. © 1999 John Wiley & Sons, Inc. Date: 1999 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:15:y:1999:i:1:p:101-118 DOI: 10.1002/(SICI)1520-6297(199924)15:1<101::AID-AGR7>3.0.CO;2-2 Access Statistics for this article Agribusiness is currently edited by Ronald W. Cotterill More articles in Agribusiness from John Wiley & Sons, Ltd. |
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